Banking on the Eurostate

[Dennis R Redmond]

Here's a short blurb from the European Investment Bank's website (the EIB
is owned by the central banks of the EU countries, and has some $150
billion in assets or so, the equivalent of a state-level German bank),
over at http://www.eib.org/pub/press/eurostrg.htm. You have to give the
Eurobourgeoisie credit: for all their alleged stodginess and inability to
match wits with ever-flexible Americans, they're clearly setting up
the necessary institutional structures for a unified currency. Anyone know
when EU governments are actually going to start issue eurobonds instead of
DM/franc/lirabonds?

-- Dennis

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EIB-Euro strategy 

            
The EIB, which each year raises large volumes of funds on capital markets,
mostly in Member States' currencies, is set to become one of the main
issuers in Euro, alongside leading sovereign issuers. The Bank is now
carrying out a borrowing strategy aimed at speeding up the creation of a
critical mass of operations in the future Euro. 

So far the EIB has been the first borrower to commit itself explicitly to
convert its outstanding ECU-denominated debt into Euro on a one-for-one
basis as soon as Monetary Union becomes a reality. By so doing, it
reassured investors in ECU bonds and underscored its support for EMU. 

With an annual borrowing capacity estimated at between ECU 20 and 25
billion, the Bank has the opportunity to make a major contribution to
establishing a large Euro presence on capital markets. In early 1997 the
Bank issued a Euro-denominated borrowing for 1.3 billion. The Bank also
began to launch benchmark issues in various Union currencies which include
an option for the Bank to convert them into Euro. These Euro-"tributary
issues" may then be consolidated with other Euro issues to create a broad
and deep Euro market. 

 
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